Regulatory Matters

6 Months Ended

Jun. 30, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Matters

NOTE 6 - REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under certain adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

In July 2013, the Federal bank regulatory agencies issued a final rule that revised their risk-based capital requirements and the method for calculating components of capital and of computing risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The final rule applies to all depository institutions and, pursuant to the Federal Reserve Board’s policy statements, to top-tier bank and savings and loan holding companies with total consolidated assets of $3.0 billion or more. The rule established a new common equity Tier

1 minimum capital requirement, increased the minimum capital ratios and assigned a higher risk weight to certain assets based on the risk associated with these assets. The final rule included a transition period that implemented the new regulations over a five-year period. These changes were fully phased in on January 1, 2019.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total common equity Tier 1, total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets. Management believes, as of June 30, 2022 and December 31, 2021, that the Bank met all capital adequacy requirements to which it is subject.

As of June 30, 2022 and December 31, 2021, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum common equity Tier 1 risk-based, total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth below. There are no conditions or events since that notification that management believes have changed the institution’s category.

The Bank’s actual capital amounts and ratios, and minimum amounts under current regulatory standards, as of June 30, 2022 and December 31, 2021, are presented in the following table:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)
June 30, 2022:
Common Equity Tier 1 Capital to Risk-    Weighted Assets	$	65,213		22.04	%	$	13,315		4.50	%	$	19,232		6.50	%
Total Capital to Risk- Weighted Assets	$	68,918		23.29	%	$	23,670		8.00	%	$	29,588		10.00	%
Tier 1 Capital to Risk- Weighted Assets	$	65,213		22.04	%	$	17,753		6.00	%	$	23,670		8.00	%
Tier I Capital to Average Assets	$	65,213		15.84	%	$	16,467		4.00	%	$	20,583		5.00	%
December 31, 2021:
Common Equity Tier 1 Capital to Risk-    Weighted Assets	$	63,764		25.08	%	$	11,441		4.50	%	$	16,526		6.50	%
Total Capital to Risk- Weighted Assets	$	66,954		26.33	%	$	20,340		8.00	%	$	25,425		10.00	%
Tier 1 Capital to Risk- Weighted Assets	$	63,764		25.08	%	$	15,255		6.00	%	$	20,340		8.00	%
Tier I Capital to Average Assets	$	63,764		16.64	%	$	15,327		4.00	%	$	19,159		5.00	%